8th November 2016 was the day on which our Prime Minister, while addressing the Nation, declared that higher denomination notes of 1000 and 500 would be tendered illegal from 9th November 2016. Come this announcement, and this has become the sole topic of discussion everywhere. Initially, I was quite pepped up with the decision. In my first reaction, I was all gaga over the guts that this man possesses. Because honestly, I feel, to take such a step, it requires lot of courage, one to face your own party mates, the opposition, and second and most importantly, the people of India, your own vote bank.
But later, as days passed, I started dwelling upon it more. I started to think whether this move would actually achieve the purpose for which it has been introduced. Whether it would really be able to curb black money and corruption, the way it has portrayed to be able to do?
I read up few articles. Most of them have spoken about how this move has hit the business, how the entire business community has condemned the Government’s decision of demonetisation, how Mr. Modi has been termed as ‘Hitler’ for introducing when and what whenever he wants, how the opposition has been accusing the government for introducing an ill-thought of decision, how the economic growth would go down in near future, how poorly this plan has been implemented, how the common man has been facing the brunt by standing in long queues, practically living without any cash, how the labourers are not receiving daily wages etc.
However, I have been able to read up few ones, favouring the move as well. The aim is certainly to make India a cashless economy, the one where all transactions would be carried on in white, making India a tax paying economy. It is being claimed that with huge inflow of deposits, lending rates might fall in future. Moreover, the Government claims that the money in higher denomination of 1000 and 500, which will not be received back for any reasons, will go into RBI credit, which would be used for constructive purpose. It is also said that demonetisation will also help widen both direct as well as indirect taxes.
In fact, Vedanta Chairman Anil Agarwal quoted that volume of business will increase once the economy goes cashless. Since there are lot of issues involved in managing cash in the business, once the transactions become cashless, the mindset will be to only focus on the business, hence, benefitting the business. Similarly, Adi Godrej opines that demonetisation will be good for the country in medium to long run. If everything is in black and white, then certainly things get too transparent and its’ to the advantage for any economy. There is smooth movement of taxes in such case.
Certainly, the decision has created large hue and cry in the country. The aim isn’t just to put black money into the economy and use it for betterment of the nation, but also, to move India towards becoming a cashless economy. People say that where more than half of India is illiterate, it is practically not possible to digitalise India and hence, make it cashless. They say that instead of focussing on digitalising India, the government should focus on providing education and basic amenities to the poor. But I believe that if the focus remains on merely educating and developing the under developed, India would take ages to come under the league of developed nations and would continue being a developing country. Improvising the condition of poor and educating them is certainly the need of hour. However, if sole focus remains on doing so, then it would take hundreds of years for India to grow. Such purpose must be achieved with also keeping progress of India in mind.
The present government has been full of surprises. It has been aiming at doing things which never any government had even thought of. I believe that we must give it the time and space to do what it has to offer.
Demonetisation is surely a game changer for the Indian economy. But it is a boon or bane that has to be seen. Till then, instead of speculating the future, we must patiently cooperate with the government, and with our fellow citizens and wait for the results.